SigmaRoc PLC Acquisition of Johnston Quarry Group (2535X)

TIDMSRC

RNS Number : 2535X

SigmaRoc PLC

04 January 2022

4 January 2022

(EPIC: SRC / Market: AIM / Sector: Construction Materials)

SIGMAROC PLC

( ' SigmaRoc ', the 'Group' or the 'Company')

Acquisition of Johnston Quarry Group

SigmaRoc plc (AIM: SRC), the AIM quoted quarried materials group, is pleased to announce the acquisition of Johnston Quarry Group Limited ('JQG') and Guiting Quarry Limited for an initial cash consideration of GBP35.5m (the 'Acquisition') from Nicholas Johnston, Giantflow Limited and Flowgiant Limited (the 'Sellers').

JQG is a specialist quarried materials supplier producing construction aggregates and premium quality building stone, as well as agricultural lime for soil improvement. Its aggregate products are typically used in infrastructure projects, with its unique Cotswolds Ironstone and Bath Stone used in specified high end housing applications. The business operates eight quarries and two separate processing sites located across the South West, Oxfordshire and Lincolnshire. JQG has access to 86 million tonnes of freehold and leasehold reserves and resources giving JQG an average life of mine of over 40 years.

For the 12 months to 30 September 2021, JQG reported revenue of GBP14.7m, generating EBITDA of GBP5.9m and GBP3.6m profit before tax. As at 30 September 2021, JQG had gross assets of GBP22.1m and net assets of GBP6.9m primarily in land, mineral reserves and plant and machines. The Acquisition, which will be immediately enhancing to SigmaRoc's underlying earnings, is expected to complete in the next few weeks, following the satisfaction of certain completion conditions. On completion of the Acquisition, Nicholas Johnston, JQG's founder, will remain available in an advisory capacity as required for smooth integration. The Acquisition consideration will be funded from the Group's existing resources, including the assumption of up to GBP6m of JQG's long term debt and up to GBP3.6m in plant hire contracts.

As part of the Acquisition, SigmaRoc has also conditionally agreed to purchase from the Sellers two further quarries, together with additional mineral reserves, for a total potential consideration of GBP14.5m. These additional sites have a strategically attractive location relative to JQG and will increase the business' footprint and market access. The consideration for the acquisition of these additional sites is payable in three phases, upon the delivery of each of the two quarries and the delivery of the mineral reserves with planning permission. The Group expects these additional transactions to complete between H2 - 2022 and H2 - 2024.

David Barrett, Chairman of SigmaRoc, commented:

"Johnston Quarry Group fits the SigmaRoc model well and I believe the benefits gained will be mutual. As a Group, we have focussed on building a portfolio of high quality stand-alone businesses, to which we can add value through our improvement and integration efforts, while maintaining those aspects of each which are unique and successful. We look forward to welcoming the JQG team to SigmaRoc and see significant potential to create value in this business over time."

Max Vermorken, CEO of SigmaRoc, commented:

"Firstly, we welcome the JQG staff to SigmaRoc and look forward to supporting them in growing and developing their very successful business. JQG is high quality quarrying group, with an attractive geographic footprint and a product range which offers both architectural and environmental benefits over alternatives. The Acquisition extends our footprint significantly in several key markets within the UK, while offering the opportunity for further improvement and platform based synergies."

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014, which forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018.

Information on the Company is available on its website, www.sigmaroc.com .

 
 SigmaRoc plc                                     Tel: +44 (0) 207 
  Max Vermorken                                    002 1080 
 Strand Hanson Limited (Nominated and Financial   Tel: +44(0) 207 409 
  Adviser)                                         3494 
  James Spinney / James Dance / Rob Patrick 
 Liberum Capital (Co-Broker)                      Tel: +44 (0) 203 
  Neil Patel / Jamie Richards / Ben Cryer          100 2000 
 Peel Hunt (Co-Broker)                            Tel: +44 (0) 20 7418 
  Mike Bell / Ed Allsopp                           8900 
 Investor Relations                               Tel: +44 (0) 207 
  Dean Masefield / Florian Werner                  002 1080 
                                                   ir@sigmaroc.com

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